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The 2020 U.S. Homebuyer: New Price Ceilings, New Housing Needs

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The 2020 U.S. Homebuyer: New Price Ceilings, New Housing Needs
5 min. read

Almost overnight, our homes became our everything. But after forcing everyone inside, the pandemic laid bare the inadequacies and shortcomings of our homes. Families with children cooped up in two-bedroom apartments and people stuck in crammed studios had to live their entire life out of their living rooms and kitchens. Needless to say, this sudden change in lifestyle had a major impact on homebuyers’ needs and expectations.

So, to map out the current profile of the U.S. buyer and compare housing preferences and priorities of home seekers before and after lockdown, we examined five months’ worth of search behavior on the Point2 real estate marketplace. We analyzed the data as a whole to discover the characteristics of the 2020 American home seeker so far. We also did a breakdown based on home searches before and after lockdown, to identify the differences in price ceilings, space needs and home features preferences in both the pre- and post-lockdown timeframes.

 

Nationwide, the Pandemic Caused Massive Changes in Buyer Behavior

Post-Lockdown Buyers to Pay More for More Space & Outdoor Amenities

When comparing the housing priorities of home seekers before and after lockdown, the changes are obvious: buyers want more space and more outdoor features and amenities. From square footage and number of bedrooms to access to outdoor amenities like pools and gardens, the post-lockdown home seekers are not willing to compromise on anything – and they are willing to pay the (higher) price to get it.

The differences in buyer preferences become even more apparent when considering their preferences before the lockdown. A 2019 Point2 analysis of the most popular keywords, features and amenities revealed that

Granite countertops, stainless-steel appliances and hardwood floors are a must, no matter the price category. […] Aside from the obligatory granite countertops and hardwood floors, descriptions almost always mention the “open floor” concept and natural light, as well as any updates the property has undergone.

Although these amenities remain important, the interest in them has increased much more slowly post-lockdown compared to interest in home features related to square footage and living space, floor plan design and outdoor home features.

However, not all homebuyers can afford to make such sweeping changes. As many first-time and repeat buyers are becoming worried about their financial stability, affordability remains an important advantage: interest in less expensive, smaller properties has also increased in certain areas, most likely driven by the more financially cautious buyers.

City Buyers Torn Between Extra Space & Affordability

In Largest U.S. Cities, Home Seekers Choose Space, a Few Go the Opposite Way

Zooming in to city level, some particularities begin to take shape. Although space became the new mantra for most post-lockdown buyers, one home feature seemed to be even more important than abundant square footage: floor plan design and efficiency; or, in other words, more walls and more separate rooms.

And this is most obvious in cities where searches related to living space seem paradoxical: buyers look for smaller, but better compartmentalized homes, with more bedrooms and bathrooms. Therefore, although affordability considerations forced some home seekers to look for smaller homes, having more bedrooms and especially more bathrooms has become a must.

Take, for example, cities like Houston, Columbus, Charlotte or Seattle. Here, searches for homes under 1,000 square feet have increased, but interest in properties with three and four or more bedrooms and three or more bathrooms is also up compared to the first months of the year. This could be a sign that potential buyers are less worried about actual space than they are about having better defined spaces, and different rooms for different activities.

This new development, which could be attributed almost entirely to the pandemic trapping everyone inside their own homes, clashes with previous trends. Before the lockdown, many homebuyers preferred open-plan rooms and interior design elements that made for seamless transitions between separate living spaces. However, just a few short weeks of parents, children and couples stuck together has reestablished the importance of and need for privacy and personal space.

The pandemic exposed the cracks in our homes’ foundations: our humble abodes were not meant to be the headquarters of all our activities. After the lockdown, homebuyers changed their expectations, focusing on more living space, more bedrooms and more bathrooms and more outdoor features and amenities to help everyone relax while socially distancing. But the pandemic also created fresh financial woes for those interested in buying.

This has led to potential buyers looking for one of two ways out of trouble: either by finding a bigger and better but more expensive home or opt for a smaller, less amenity-rich home, but one that better fits a future that might bring some serious financial challenges.

Methodology:

  • Consumer behavior and demographic data sourced from marketplace Point2 from January 1 to May 31, 2020.  
  • 1.699.576 searches were analyzed. Percentages and shares for each category were calculated based on how many searches included a certain keyword (e.g. “1-bath”, “3-beds) from the total number of searches, both for the entire period and for the two separate time frames: before and after lockdown, for comparison purposes. 
  • Before and after lockdown comparisons based on two time periods: January 1 to March 15 vs March 16 to May 31.   
  • Median sale price sourced from PropertyShark for: Los Angeles, Chicago, Philadelphia, San Diego, San Jose, Columbus, San Francisco, Indianapolis, Denver, Boston, El Paso, Detroit, Nashville, Memphis, Oklahoma City, Louisville, Baltimore, Bronx, Brooklyn, Manhattan, Queens and Staten Island.
  • Median sale price from other sources for the following cities: Houston, Phoenix, San Antonio, Dallas, Austin, Jacksonville, Fort Worth, Charlotte, Seattle, Washington, Portland and Las Vegas.
  • All percentages were rounded. Due to rounding, percentages in this report may not add up precisely to 100%.

Fair use and redistribution

We encourage you and freely grant you permission to reuse, host, or repost the story in this article. When doing so, we only ask that you kindly attribute the authors by linking to Point2Homes.com or this page, so that your readers can learn more about this project, the research behind it and its methodology.

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